New York, NY, Feb. 9--After a week fending off questions from his former boss' lawyers, the prosecution's key witness against Martha Stewart now must face more barrages--this time from Stewart's camp.
Douglas Faneuil, the Merrill Lynch & Co. assistant who handled Stewart's well-timed sale of ImClone Systems stock in December 2001, was returning Monday to the witness stand for his fourth day of testimony and the first in which Stewart's lawyers get to cross-examine him.
Faneuil, 28, testified last week that Stewart's broker, Peter Bacanovic, ordered him to tip her off that ImClone founder Sam Waksal was selling his shares.
He also claimed Bacanovic, desperately trying to protect a lucrative career at Merrill, pressured him into initially lying to investigators. He changed his story in June 2002 and struck a plea deal with the government.
Stewart and Bacanovic are accused of repeatedly lying to the government about the circumstances of the sale. They claim they had a pre-existing deal to sell ImClone when it fell to $60.
ImClone stock dropped sharply four days after Stewart sold, when news emerged that its highly touted cancer drug had been rejected by the government. But Stewart is not criminally charged with insider trading.
On Thursday, Bacanovic's lawyers introduced e-mails in which Faneuil described Stewart as yelling and cursing at him. In one, he told a friend that he had defended himself and "Baby put Ms. Martha in her place."
The lawyers were hoping to show that Faneuil hated Stewart, was fixated with her and was out to get her.
However, Robert Mintz, a former federal prosecutor, said Faneuil's testimony has been convincing so far, particularly in explaining why he initially lied to the government.
"Doug Faneuil has come across as credible and as someone who has found himself, through no fault of his own, as the linchpin of the entire prosecution case," Mintz said.
